Palomar Medical Technologies, Inc. (PMTI)

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President And CEO Interview: Palomar Medical Technologies, Inc. (PMTI) - Joseph P. Caruso
January 26, 2011, 4:09 pm EST

In the following brief excerpt from the Medical Devices Report, interviewees discuss the outlook for the sector and for investors.

Joseph P. Caruso has held senior management positions at Palomar Medical Technologies, Inc., since 1992, the year after its founding, and he has been one of the company's Directors since October 2001. In his most recent tenure as President and CEO, Mr. Caruso has focused the company on light-based aesthetic treatments. Within and outside of the organization, Mr. Caruso has championed the strategy of cascading laser technology from professional settings, such as doctors' offices, to at-home use.

TWST: Please start with a short introduction to Palomar Medical's operations.

Mr. Caruso: We are a company that develops, sells and markets professional light-based aesthetic devices, and recently we've expanded that into the consumer market as well.

TWST: Would you comment on your platform and the total number of procedures you have built into that platform?

Mr. Caruso: We sell devices to the professional market, including dermatologists, plastic surgeons and other physicians around the world. We have thousands of systems installed, and those thousands of systems are used in many different treatments around the world.

TWST: Do you sell one workstation for all of these applications?

Mr. Caruso: We sell a number of different products. It is a base system that runs a number of handpiece applicators that all do different treatments, but they're all focused on aesthetic light-based procedures.

TWST: What are the more popular applications?

Mr. Caruso: The most popular application is light-based hair removal. Palomar (PMTI)was the first company to receive FDA clearance for a high-powered light-based hair removal device in 1996, and we also control the key patents for light-based hair removal. That's the most popular application of light-based aesthetic treatment today. In addition to that, we also control a fundamental patent in fractional technology for our devices.

And those types of applications include things like skin resurfacing, skin rejuvenation, wrinkle treatments, skin tightening. These are applications that are all grouped into facial rejuvenation or skin rejuvenation treatments, and we sell a number of different products in that area as well. We also sell some specialty laser devices and applications that include laser lipolysis, so using a laser, a light source to melt the fat before that fat is removed - that's a minimally invasive procedure - as well as some other procedures, including tattoo removal, leg vein treatment and so forth.

TWST: Aside from hair removal, how often does a patient have to return for a lasting solution?

Mr. Caruso: It depends on the application and the treatment. Some applications of our technology are one-time, such as leg vein treatments for instance, or rosacea; some of those can be done in one treatment. Many of the treatments are done in multiple treatment protocols, including tattoo removal, non-ablative and ablative skin rejuvenation, hair removal, as you mentioned, and some others. So most of the procedures are multiple applications of the technology anywhere from two to as many as eight different procedures in a course of treatment, and some of the treatments can be done in one treatment.

TWST: What is the cost range for a typical noninvasive aesthetic laser treatment?

Mr. Caruso: Depending on where it's done and the type of treatment, treatment's pricing can range anywhere from as low as $50 a treatment to as much as $1,000 a treatment. It's a very wide range of pricing.

TWST: Are these units sold directly to the physician? Is that your basic business model?

Mr. Caruso: The basic business model is we research, develop and manufacture the equipment. We then sell the devices directly or through distributors to the physicians for use on their patients.

TWST: What's Palomar's growth rate and how would you compare it with the overall marketplace?

Mr. Caruso: Our growth rate was very substantial and dramatic from 2001 to 2007. When the worldwide economic recession hit in 2008-2009, we saw a big drop-off in our business. But over the last four quarters or so, we've seen some growth come back into the market and into the business.

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